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First, the headline: Apple is reportedly set to buy the Dr. Dre-fronted Beats Electronics for some $3.2 billion. A hefty price tag for any acquisition—and even more surprising number when once considers what Beats really is: A fashion brand.

While tech writers and audiophiles love to naysay the company's premium price tags (many models peak past $300), it's still very clear that Beats has been an enormously successful brand that has pulled off the Herculean feat of making consumers comfortable with spending hundreds of dollars on headphones. The company's formula for pulling this off: Blur the line between electronics and fashion—a field where committed customers have long shelled out serious cash.

Of course, this creates a potential problem down the line: Fashion is, almost by definition, fickle. If Beats is to justify its sky-high price tag, it's going to need to have legs. The entire Beats brand is built around cool. And cool changes. It dries up. It shifts allegiances. It reaches a saturation point in which a teenager's mom suddenly has her own pair of Beats, and the kid cringes.

(Photo credit: plex)

For a sense of where the Beats brand is going, one needs to go no further than the world's biggest headphones battle royale: The New York City subway system. Riding the rails over the past few years, I saw Beats spread from a few bopping heads, to what seems like half a train car. I've seen the customer demographics evolve from teenagers to their business-suited parents.

And I've seen something else in this fashion focus group: Fewer folks wearing Beats—at least the easily identifiable, colorful, over-ear models—than they did a couple of years ago. The potential problem for the brand: Trends that begin in the NYC subway often eventually trickle into suburban schools and offices.

Now, the headphone market may be moving more towards the harder-to-identify in-ear models, with which Beats has several offerings and could be doing quite well. But when you're as much a fashion accessory as an audio product, you lose some of your innate strengths when you move from head-hugging over-ears to discreet in-ears.

I also have a strong sense that the headphone market is also moving more towards the discreet in general—even for big over-ear models. Beats is certainly attempting to respond with less-flashy models that appear aimed more at the older, business-traveller market (the "Bose demographic", if you will), but it's to be seen whether they will have the same success here that they have had with their initial blockbusters.

Beats is as much a fashion brand as an electronics brand, and the fashion landscape is paved with fad companies that failed to thrive past their prime (when was the last time you wore Bugle Boy or No Fear gear?). For the company to justify its $3.2 billion price tag, it will need to prove itself a brand that is capable of both defining and changing with its times. The challenge for Apple will be to shepherd the brand over this hump.